New childcare tax break to be announced by the Government today - what do you think?

as a nanny I drive the children around so I am already an early years qualified chauffeur. Alas I expect there is some tax rule that stops parents with nannies claiming they are a chauffeur.

If I were to use a local nursery (SW London) it would cost me £150 per day for my 2 (under 3). I'm not quite sure how much I would have to earn to cover it, but it's an absolute bloody fortune.

This sort of 'help' towards childcare is a bloody flash in the pan for someone like me.

If you have kids you may aswell just empty your bank account into a big pile and set it all on fire IMHO.

I don't work as the loss of income is far preferable than never seeing the kids and paying throught the nose for the priviledge.

This has all the hallmarks of another awful Tory policy..........seriously who have they got working on policy atm? I think my 14 yr could do better and I know I could!

"Otherwise why aren't all parents working for companies that offer it?" - because there's no incentive for companies to offer it? Many companies even get grumpy about offering vouchers. It's amazing that NotAQueef's company is offering it. I didn't know it was possible. But if they can do it, it seems it's possible that others could too without too much trouble.

I like the idea of employing an NVQ qualified chauffeur!!

Surely salary sacrifice can't be used to pay 100% of your childcare costs out of gross income? Otherwise why aren't all parents working for companies that offer it?

Beer is taxed? "Well, let them drink champagne!"

Or, how about employing a chauffeur who happens to have a level 2 NVQ in early years care.

Sorry for taking thread on a slight tangent.

"You will enter into a salary sacrifice agreement, whereby your salary is reduced by an equivalent amount to the Day Nursery fees. The fees are then paid directly from the University to the Day Nursery.

Info comparing normal childcare voucher scheme (also offered) with flexible benefit
Childcare voucher scheme
? Managed online direct with voucher provider
? Maximum amount that can be sacrificed is £243 per month
? The amount of vouchers can be changed online at any time, subject to meeting payroll deadlines
Flexible benefits scheme
? Administered by Human Resources
? There is no maximum amount that can be sacrificed (although salary cannot be reduced to lower than NMW)
? The salary sacrifice agreement cannot generally be changed within the financial year

Horatia I've just checked and the flexible benefit we use has no limits of the amount of salary which can be sacrificed (but not to below min wage)

NotAQueef - please check! I've just looked at my payslip (work at university too) and there's definitely a section called 'Childcare benefit' (£243)that's deducted from my basic pay. And then other deductions like Tax, NI, pension carpark etc...

That is also true. But if all childcare were tax destructible, they might be able to afford it, wouldn't have to struggle so hard to make arrangements that work.

HoratiaWinwood I am now ...
Our place of work offers this as a salary sacrifice benefit above and beyond the voucher scheme. I have just checked the example document they provided to us and the numbers seem right.
DP earns almost 40k and nursery fees are around 11k per year (I don't pay them so can't give exact numbers) so he is only taxed and NI'd on 29k of his salary
we definitely save more than £243 per month (I think ...)
I will go and have to check now.

It looks as though anyone who wants to be a full-time parent had better become a childminder - and look after the children of those who are lucky enough to find work!

That's true Annie - it is a truth universally acknowledged that some people will just have to pay for childcare in order to work and I am one of them - but it is still worth noting that those who don't are often struggling with great ingenuity within a system of very very expensive formal childcare, and they are being penalised for this resourcefulness.

Though to be fair, curryeater, some people are low-paid in jobs which don't have shift patterns nor family to help, and reciprocal arrangements aren't easy. I think this is why a lot of us are arguing for a universally fair system such as fully-tax deductible childcare costs, as this will cover all eventualities and situations.

have to admit i got excited when i saw it but then read on and to me it sounds like they are going to replace the childcare voucher scheme and if this is the plan we are no better off.

How does this tie in - in detail - with the Universal Credit?

What happens with help for children requiring paid childcare age 5-15?

What forms of childcare is covered? Nanny? Au Pair? Nursery? Family?

Why not just have 100% tax deductable childcare for those in work?

There are two separate things here:

Should child-care be tax-deductable? - yes, obviously, but completely, not partially

Does this off-set losses in CB? - only if you work and pay for childcare. Lots of people (especially the lower paid) have deliberately and painstakingly constructed lives which do not require paid-for childcare, because it is eye-wateringly expensive (shift working, reciprocal arrangements, family help etc). This is very unfair. It's like giving tax relief on champagne but not beer.

if they axe childcare vouchers, what happens to the money that is sat there (ie any accumulation) as most schemes will want to close? I hope you don't lose the money...

Thanks, curry.

And I do think whatever they announce will replace the vouchers because it would not be cost effective for the government to run two separate schemes.

I wonder if they might axe that ofsted quango in order to pay for giving me tax free childcare... hey, a girl can dream.

I strongly believe all ccare should be payable out of gross income. It is an expense that is necessary in order to go to work!

I have a feeling I will be no better off or in fact will be worse off. It depends if the £2000 is savings made or tax deductible allowance. If the latter I will be worse off than currently claiming childcare vouchers. If the former I will be no better off. (1 child, I'm higher rate taxpayer, DP is basic, we both claim vouchers, but I get less)

I'm very disappointed thought this would be helping working parents more but in fact it is just a simplification of all the kinds of childcare help into one method and doesn't actually help at all.

x-posted with Strix. Strix is right

If it means you actually get £2k per child back, than it's better than the vouchers. If it means you can get tax back on £2k, then it's worse.
But the whole lot should be tax free. If you gross up what you need to earn to pay for two pre-schoolers in full time care, it makes you feel ill. (It makes you feel ill before you gross it up, then afterwards has you actually reaching for a bucket)

From what I read, it looks like this policy would cost us the whole of our 12 x £243 vouchers claimed by DH, to be replaced by nothing as I don't earn enough to qualify.
If we are entitled to the £2k per child, only our youngest would qualify, despite needing childcare for all 3 to cover before / after school. I am lucky to work part-time, flexibly, term-time only, so out-of-school care for us is far less than many will need to pay for, but this is at the expense of having given up both salary and responsibility to take on a role which allowed this.
So, personally it appears we will lose out financially (again!) and, if the reports of it being mothers earning £20-40k who will be eligible, it will also not help many lower paid / part-time workers, only those higher up the ladder, which seems perverse if the aim is to encourage women to return to work.

Notaqueef - the current tax relief is only available up to £243 ish a month. You might be getting £11k a year in vouchers but the sums are being done wrong if they're calculating his taxable income on gross minus eleven.